National Savings Certificates are they worth continuing to invest in

janehp

Hi
Anyone advise me on whether it is worth continuing to invest in NS&I certificates. I have 2, each worth approx. 17,000 and due to roll into another 3 years. As the rate is now only 0.05% and inflation is low would I be better putting my money somewhere else? (I realise a crystal ball is required to be certain as to what inflation will do over the coming years)

I have no idea how to work out a comparison with other types of savings. I'm a basic rate tax payer.


Thanks

silvermum

Have you used your ISA allowance for 2013-14?
You could get about 2.5% if you're willing to fix for 3 years.
With the increase in ISA allowances you could invest about £20k this year.

Santander 123 current account is paying 3%...

Colin_Hunt

janehp wrote: »

Hi
Anyone advise me on whether it is worth continuing to invest in NS&I certificates. I have 2, each worth approx. 17,000 and due to roll into another 3 years. As the rate is now only 0.05% and inflation is low would I be better putting my money somewhere else? (I realise a crystal ball is required to be certain as to what inflation will do over the coming years)

I have no idea how to work out a comparison with other types of savings. I'm a basic rate tax payer.


Thanks

They dont pay 0.05%, they pay inflation plus 0.05%.
Risk free, tax free.

ColdIron

Where else can you get an inflation beating, tax free product, guaranteed by The Treasury for 5 years?

Don't forget they have been withdrawn from sale, who knows if they will ever be available again

are they worth continuing to invest in?

If you don't need the cash soon, yes they are

silvermum

Colin_Hunt wrote: »

They dont pay 0.05%, they pay inflation plus 0.05%.
Risk free, tax free.

Ah - in which case, yes, I agree with Colin - may well be worth keeping.

With RPI running at 2.7% you'd be hard pushed to do better in a tax free/ risk free way.

Think you'd need equivalent of 3.4% for basic rate, 4.5% for higher rate tax payers?

janehp

Thanks, that's convinced me, will roll them over for another 3 years

owl_fan

At the time when I invested, I got the impression that it was the best rate available tax free. ISA rates seem to be coming down and so I would say, stick with it. The reduced interest rate is par for the course - actually I hadn't heard about it, but I'm keeping mine and my parents (who are canny investors) will keep theirs too.

veryintrigued

This should be a sticky - same question gets asked almost every month!!

kidmugsy

janehp wrote: »

Thanks, that's convinced me, will roll them over for another 3 years

Consider diversifying: roll one over for 3 years, the other for 5?